The Little Known $24 Million Fraud

by Mindy Y. Kubs | February 2020
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Did you know that a $24 million fraud involving a well-known fast food company game was uncovered by the FBI in 2001? Probably not. Although the news first broke in 2001, it was largely overshadowed by the 911 terrorist attacks. The story is now coming to light through the release of HBO’s new documentary Millions$. This six-part series tells the tale of how Jerome (“Uncle Jerry”) Jacobson, with the assistance of the Mafia and a network of other “recruits,” stole and distributed winning game pieces to family and friends in exchange for a cut of the prizes.

Many of us played the McDonalds’ Monopoly game at one time or another over the last few decades, trying to collect game pieces from food containers and print ads with the hopes of winning cars, vacations, and the $1 million grand prize. While some of the game pieces awarded instant prizes, most of them resembled a property from the Monopoly game, and prizes were won when all properties in the same set were collected.

The game pieces were not printed in equal numbers, so while some properties were relatively easy to collect, at least one piece in each set was printed in a very limited number. Customers could quickly collect three out of four properties needed to win a prize, but the odds of finding that final piece were roughly 1 in 150 million. (https://priceonomics.com/the-mcdonalds-monopoly-fraud/). The odds of winning the entire jackpot was about one in 250 million. Most of us can probably remember winning a free milkshake or medium fries.

The FBI investigation started after its small office in Jacksonville, Florida received a tip that three major prize winners were members of the same family, though they had different last names. A young agent looking to investigate something other than his usual load of healthcare fraud cases asked his boss if he could do some digging. What started with a few phone calls developed into a full scale investigation including undercover work, phone tapping, and an elaborate rouse to interview past “winners” in an effort to discover how the fraud was being orchestrated, and by whom. The FBI ultimately determined that the scheme was orchestrated by the one man who was hired to keep the high value pieces from being stolen.

Jacobson was a security officer with McDonalds’ marketing firm, Simon Marketing, and he was tasked with overseeing the delivery of high value game pieces to the factory where they would be placed on food containers and print ads. Although the pieces were placed in tamperproof envelopes, Jacobson figured out a way to steal pieces and, because he could not redeem them himself, he enlisted family and friends with different last names to redeem the pieces in exchange for a cut of the prize money. Needing more “recruits” to redeem prize-winning pieces, Uncle Jerry eventually teamed up with Gennaro “Jerry” Colombo, a member of the New York Colombo crime family. Colombo distributed $1 million tickets to family and friends, taking a cut for himself and Jacobson with each ticket. As the scheme continued, Jacobson found even more recruiters. Ultimately, 51 people were indicted as a result of the FBI’s investigation, most of them on charges of conspiracy and fraud. Uncle Jerry pled guilty and was sentenced to three years in prison. He was also ordered to pay restitution in the amount of $12.5 million.

Following the arrest of Uncle Jerry and others in 2001, McDonalds and Simon Marketing sued one another, and McDonalds eventually agreed to pay Simon Marketing $16.6 million. McDonalds also faced a class action lawsuit from over 1,000 Burger King franchises, though the suit was later dismissed. In an effort to redeem itself in the eyes of the public, McDonalds gave away an additional $25 million in prizes. Notwithstanding the scandal, McDonalds continued to run the Monopoly game in the United States until 2016. (https://www.vulture.com/2020/02/mcdonalds-monopoly-game-fraud-true-story.html).